C2 Gateway Series 3
The Units in C2 - Gateway - Series 3 ("Series 3 Units") provide returns based on the "dispersion" of the Shares comprising the Reference Asset. Dispersion measures the deviation of the performance of individual shares relative to the performance of a basket.
C2 Gateway Series 3 - Performance
* Indicative Unit Price: Investors, please note this is a theoretical Unit Price, assuming that the Units had reached Maturity. This investment is designed to be held to Maturity. Any Investors seeking to redeem prior to Maturity may receive an amount significantly different to the Indicative Unit Value stated. Please refer to the PDS for more information about the value of the Investment prior to Maturity.
# Apple share split 4:1 on 31 August 2020. Nvidia share split 4:1 20 July 2021. Adjusted Starting Price displayed.
# NVIDIA Corp share split 4:1 on 20 July 2021. Adjusted Starting Price displayed.
C2 Gateway Series 3 - Description
Dispersion offers investors the potential for positive returns which could be uncorrelated to the direction of equity markets. The Units utilise 15 Nasdaq listed technology shares (each a “Share”, together the "Reference Asset") to extract value. The return of the investment is determined by how dispersed the returns of these 15 Shares are in absolute terms on five (5) Performance Coupon Determination Dates during the 5-year Investment Term. The higher the Dispersion, the higher the returns1
The Units offer Investors features such as
- 100% LVR Limited Recourse Loan (LVR = Loan to Valuation Ratio)
- Limited Recourse Loan. No personal guarantees required. No Margin Calls.
- Interest Rates of 5.45%p.a;
- 5 year term;
- Investors are only required to pay 3 years of Interest upfront, then the remaining 2 years are paid annually thereafter;
- Losses are limited to Prepaid Interest and any Fees[2];
- any positive performance is paid out annually in the form of Performance Coupons. This effectively locks in any gains for Investors during the Investment Term. There are five (5) potential uncapped Performance Coupons[3] at the end of Year 1, Year 2, Year 3, Year 4 and Year 5 (Maturity), calculated by reference to the Dispersion of the Reference Asset and the Strike.
- Exposure to the AUD/USD exchange rate for the Performance Coupons (if any)
- The ability to Walk-Away at the end of Year 3 and Year 4 if the investor wants to discontinue their Investment. Walk Away from the Loan and not make any further interest payments and with no requirement to repay the Loan principal[4]
- If the investment returns are negative, there is no shortfall to pay at Maturity. Investors can simply walk away;
- No credit checks;
- SMSFs are eligible to invest;
| Share | Ticker | ||||
| 1 | Apple Inc | AAPL UW Equity | 9 | Comcast Corp | CMCSA UW Equity |
| 2 | Amazon.com Inc | AMZN UW Equity | 10 | NVIDIA Corp | NVDA UW Equity |
| 3 | Alphabet Inc | GOOGL UW Equity | 11 | Amgen Inc | AMGN UW Equity |
| 4 | Microsoft Corp | MSFT UW Equity | 12 | Adobe Systems Inc | ADBE UW Equity |
| 5 | Facebook Inc | FB UW Equity | 13 | Texas Instruments Inc | TXN UW Equity |
| 6 | Intel Corp | INTC UW Equity | 14 | PayPal Holdings Inc | PYPL UW Equity |
| 7 | Cisco Systems Inc | CSCO UW Equity | 15 | Baidu IncChina ADR | BIDU UW Equity |
| 8 | Netflix Inc | NFLX UW Equity |
How is Dispersion calculated?
The examples below are hypothetical only and are not forecasts or simulations of Unit returns nor are they a reference to past performance. The actual returns on the Units may be materially different from what is shown in these examples.
Dispersion is calculated as follows:
- At the relevant Performance Coupon Determination Date, calculate the individual performance of each Share in the Reference Asset from the Commencement Date to the relevant Performance Coupon Determination Date, then calculate the average performance of the Shares for such period;
- Subtract the average Share performance from each individual Share’s performance;
- Then take the absolute value of the adjusted individual Share performance;
- The average of these values is the “Dispersion”.
For example, if there were 2 Shares in the Reference Asset, one Share was up (+60%) and one Share was down (-40%), the Dispersion would be calculated as follows:
| 1 | Calculate the average performance of the Shares | Share 1: +60% Share 2: -40% Average =+10% |
| 2 | Subtract the average Share performance from the individual Share's performance | Share 1: 60%-50%=50% Share 2: -40% -10% = -50% |
| 3 | Then take the absolute value of the individual Share performance | Share 1: |50%| =50% Share 2: |-50%| =50% |
| 4 | The average of these is the "Dispersion" | Dispersion =50% |
Dispersion is used to calculate potential Performance Coupons on on five (5) Performance Coupon Determination Dates during the 5-year Investment Term of C2 Gateway Series 4. The higher the Dispersion, the higher the returns (subject to first exceeding the Strike)[1].
[1] Please refer to "Performance Coupons and Formulae for Dispersion" in Section 2 of the Term Sheet PDS for how the Dispersion is calculated.
[2] Please refer to Section 2 of the Term Sheet PDS for more information on Fees payable.
[3] subject to a Performance Fee and movements in the AUD/USD exchange rate between the Commencement Date and the relevant Performance Coupon Determination Date.
[4] Where investors elect to Walk Away, they will not be entitled to the Performance Coupon at the time (if any) or any future Performance Coupons or Final Value or any other returns and the Investment will be terminated
Find out more about C2 Gateway Series 4
Download the Flyer, Term Sheet PDS and Master PDS in the "Literature" tab above or complete the form below and we'll be in touch as soon as possible.
C2 Gateway Series 3 - Key Dates
| Timeline1 | |
|---|---|
| Commencement Date / Issue Date | 17 July 2019 |
| First Interest Payment Date (“Application Payment Date”) | 10 July 2019 |
| Second Interest Payment Date at end of Year 3 | 25 July 2022 |
| Third Interest Payment Date at end of Year 4 | 24 July 2023 |
| First Performance Coupon Determination Date at end of Year 1 | 17 July 2020 |
| Second Performance Coupon Determination Date at end of Year 2 | 19 July 2021 |
| Third Performance Coupon Determination Date at end of Year 3 | 18 July 2022 |
| Fourth Performance Coupon Determination Date at end of Year 4 | 17 July 2023 |
| Final Performance Coupon Determination Date at end of Year 5 (at Maturity) | 17 July 2024 |
| Maturity Date | 17 July 2024 |
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C2 Gateway Series 3 - Risks
- Your return (in the form of potential Performance Coupons) is affected by the performance of the Shares comprising the Reference Asset. Specifically, there needs to be significant Dispersion to generate positive returns.
- No Performance Coupons will be payable if the Dispersion is not greater than the Strike and the sum of any Performance Coupons already paid.
- Performance Coupons are subject to movements in the AUD/USD exchange rate.
- Investors must pay the Prepaid Interest to be entitled to receive any Performance Coupons. If Prepaid Interest is not paid on the relevant due date, Investors Units will be terminated, they will not be entitled to any returns or a refund of any Prepaid Interest or Fees paid to date, will have no entitlement to any future Performance Coupons and will have no further exposure to the Units.
- Performance Coupons (if any) will first be set off against any additional Prepaid Interest owing, and Investors will be paid any surplus. Investors are not entitled to the Performance Coupons (if any) or any other returns on the Units if they have not paid the Prepaid Interest in advance for the upcoming year in accordance with the terms of this PDS and Master PDS.
- There is no guarantee that the Units will generate returns in excess of the Prepaid Interest and any Fees during the Investment Term. Additionally, in the event of an Investor requested Issuer Buy-Back, Early Maturity Event, or if you elect to exercise the Annual Walk Away Option before the Maturity Date, you will not receive a refund of your Prepaid Interest or any Fees nor will you be entitled to any Performance Coupons.
- Gains (and losses) may be magnified by the use of leverage.
- Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty.
- The Units may mature early following an Early Maturity Event, including an Adjustment Event, Market Disruption Event or if the Issuer accepts your request for an Issuer Buy-Back.
For more information on the applicable risks, please refer to the Term Sheet PDS and Section 2 “Risks” of the Master PDS. To find out more about the investments, please contact C2 Specialist Investments on 02 8098 0300 or email [email protected]
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C2 Gateway Series 3 Literature
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C2 Gateway Series 2 - Disclaimer
Past Performance Disclaimer
Any Historical Performance Simulations have been provided to help investors get an idea of how the Shares in the basket have Dispersed over time using 5 year periods with rolling start dates for the period 3 Jan 2007 to 17 April 2014. Future levels of dispersion should be expected to vary and may be less than the Strike. Historical information for this product has been used by the Issuer in order to provide an illustration of how the Investment may have performed over a defined period. This analysis has been prepared in good faith in accordance with the Issuer’s own internal models and calculation methods using publicly available market information sources where considered relevant. Analysis based on different models or assumptions may yield different results. Numerous factors may affect the analysis, which may or may not be taken into account. Therefore, this analysis may vary significantly from analysis obtained from other sources or market participants. Where data was not available for the full simulation period, the Issuer has substituted Nasdaq (NDX) as a proxy, which it considers to be a reasonable substitution. NDX was substituted for Facebook for the period Jan 2007 to May 2012, and also for Paypal for the period Jan 2007 to July 2015. Please contact the Issuer for more information if required. The Issuer does not guarantee the accuracy or completeness of this analysis or calculation methods, the accuracy or reliability of any market information sources used, any errors or omissions in computing or disseminating this analysis and cannot accept responsibility for any investment decision or use you make of it.
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